The “Big Goal” Roadmap

Author’s Note: This Big Goal Roadmap has been updated! Please see the new and improved Big Goal Roadmap here.

The common rule is that a goal must be SMART (Specific, Measurable, Assignable, Realistic, and Time-Bound). Making a high-level plan to get there ensures I have covered those bases. The following is my big goal and a brief overview of how I plan to accomplish it. Below that will be periodic posts updating progress toward this goal as well as detailing interim, smaller goals.

Specific: Retire From My 9-5 Job

This is the idea behind this whole endeavor. I want to have the freedom to raise my kids, enjoy my wife, travel, work at my leisure, pursue other passions, and relax. I want to own my time. I want to do this without having any financial worries or experiencing a noticeable drop in lifestyle

Measurable: (Passive Income + Side Hustles) > Expenses

In the initial phase of retirement, I’m content with having to “hustle” for some income, but I want to fund the vast majority of my expenses with passive income and without tapping into investment principal.

Assignable: It’s All On Me, Baby

Although I do have a very supportive family.

Realistic: Yes

See Below for Strategy

Time-Bound: Baby 29’s First Day of School (Sep. 3rd, 2019)

This goal date is about five years from day zero; I’ll be 34 years old. To do this, I’ll have to overcome a rather significant problem.

Interest: Continue contributing to life-insured annuity, which currently yields $50/mo.

Start Side Hustlin’ from $0/mo to $100/mo

Writing: Do what I like to be best, talk about stocks! Start writing on SeekingAlpha.com ~1 Article/mo.

These efforts should get me to here…

Mid-2015 Situation

Monthly Expenses

$5,000

Monthly Passive Income

$800

Monthly Side Hustle

$100

Surplus (Deficit)

($4,100)

Mid-Term Strategy (June 2015 – June 2019):

Decrease Monthly Expenses from $5,000/mo to $4,900/mo.

Other: Optimize the use of rewards credit cards/gift cards to further eliminate $100/mo from categories like travel, utilities, and food and household costs. Dropping just $100 in expenses over the course of four years seems almost too easy of a goal. However, I’m gaming on adding a few children to the mix over this time, so that will likely offset a lot of my expense optimizing effort. I don’t really worry too much about inflation.

Interest: Continue contributing to life-insured annuity, increasing interest income by 15% per year, from $50/mo to about$100/mo.

Rental Income: Acquire 2-3 rental units yielding a average monthly net income of $400/mo. This can (and probably will) include us renting out our basement either full time or part time (like AirBnB).

Keep Side Hustlin’ from $100/mo to $500/mo.

Writing: Do what I like to be best, talk about stocks! Increase writing on SeekingAlpha.com to ~4 Articles/mo.

Blog: Not expecting a cash cow or anything, but it’d be great if I could monetize the blog to the extent that it pays for itself.

These efforts should get me to here…

Mid-2019 Situation (Proj.)

Monthly Expenses

$4,900

Monthly Passive Income

$2,200

Monthly Side Hustle

$500

Surplus (Deficit)

($2,200)

Long-Term Strategy (Mid-2019 – Retirement…)

Decrease Monthly Expenses from $4,900/mo to $3,200/mo.

Housing: Refinance and rent primary home, decreasing mortgage payment from $2,800/mo to $2,200/mo (thereby making a $2,500/mo tenant cash-flow positive). Upon entry into retirement, move to cost-friendly locale, taking out a mortgage and total housing costs not-to-exceed $1,100/mo. Ultimately, decreasing housing costs from $2,800/mo to $1,100/mo. Once retired, there shouldn’t be much need to stay in the high-cost DC suburbs of Northern VA.

Back-up option: Rather than refi-rent-and-move. Simply sell our current primary home, take that equity and buy a similar home with cash in a low-cost locale. This would decrease our expenses another $900/mo or so, but would obviously remove the extra rental income shown below. We’ll explore this based on how things turn out.

Interest: Continue contributing to life-insured annuity, increasing interest income by 10% per year, from $100/mo. No real material change.

Rental Income: Add our current primary home to our slate of rental units (see 1.a directly above). Along with small increases via inflation, increasing rental income from $400/mo to $700/mo.

Keep Side Hustlin’ from $500/mo to $800/mo.

Writing: Do what I like to do best, talk about stocks! Increase writing on SeekingAlpha.com to ~8 Articles/mo.

Blog: Not expecting a cash cow or anything, but it’d be great if I could monetize the blog to the extent that it pays for itself, potentially a bit more.

Part-Time Work: This would hopefully be unnecessary, but my wife and I are still fully capable and healthy adults with pretty good skill sets. Should any of the above fall through (dividend cuts, bad tenant, unexpected large expense), we can always resort to a little part-time work. $0/mo.

Retirement Situation (Proj.)

Monthly Expenses

$3,200

Monthly Passive Income

$3,400

Monthly Side Hustle

$800

Surplus (Deficit)

$1,000

Is this possible? I’d say it’s certainly possible... but, it’s also certainly aggressive—which is fine with me. I’ll try to post updates at least quarterly with progress toward this goal, but the monthly financial reports should touch on it consistently.

There is one follow-on goal. Once retired, I’d like to continue to decrease any reliance on “side hustles.” Not that side hustles are any less reliable than regular work (what is regular work other than a side hustle that takes a ton of time?), but I’d like to continually gain more freedom and ownership over my time. My retirementality is that working in some respect is always going to be the case—but I want to freedom to not have to work.

Your idea for rental property is right on. We have made about one million dollars in real estate over the past thirty years. Not a penny of it from the stock market. We had twenty one rentals at one. Sold the income property last year and am now in to the stock market. We found an area in the rental market that wasn’t being met – small one bed room apartments that were ideal for one or two people. We built two four unit and one five unit buildings. Over the years we had several house and built a three bed room duplex. Found out three bed room rentals were far more trouble than one bed room units. Getting started you have to do three things – have new buildings which are easy to maintain – be able to do all the work your self, cleaning painting and repairs – live close to your rentals. Real estate and rentals are better than the stock market because you operate with other people’s money. Good luck. You have many years to make money and enjoy your family.

J. Money, First, I’m a big fan. Thanks for all you do at Rockstar and your other sites. I appreciate you stopping by and commenting. To point, seeing all the old financial baggage fall away is super motivating–just wait for this month’s expense report.

Love your post! Question for you, how are you going to take money out of your 401k and IRA before 59 and a half? 99% of all my investments are 401k and Roth IRA and I thought I couldn’t access them and would have to start some taxable accounts so I can retire in 10 years. (Thats my goal!) Thanks for your help!

Definitely a valid question. I’ll roll my about $30k/year from my traditional IRA to a Roth starting my first year of retirement. I’ll have to pay taxes on the rollover, but my deductions will nullify almost the whole tax bill. After five years sitting in a Roth, I’ll be able to withdraw the amount without tax or penalty. I’ll have enough in my current Roth and Taxable brokerage to get me through those first few years pretty safely.

Have you taken into account additional spending over time with the child (or potential children)? I’d have to imagine spending will go up for the ‘kids’ bucket, therefore offsetting some of your monthly expenses reduction?

Hi Ryan, Spending will definitely go up, I’m sort of counting on it. However, despite the many reports of insane child costs, we’ve found that children (so far) are a far less burdensome cost that purported in the media. I did write one post on it, showing how our first baby has actually made us money so far. If we had a second child right now, it’d be super profitable, given the tax benefits and the fact that we already have most everything we need for the first few years of life (except diapers and wipes).

Children are generally as expensive as you want them to be, we’ve found. We spend a lot of time playing, walking around the neighborhood, watching some Netflix, and other non-materialistic things. We try to avoid needless waste. Check out that post for more in-depth analysis.

Awesome blog Mr. 29. All comes down to minimizing expenses and looking for side/passive income. I am a few years elder than you yet 100k behind, and worse still, living in expensive norcal. I’ve started a couple of side-business (5group.co)that is managed by my wife and I ‘ve outsourced some of the work to Africa (80% cheaper). Furthermore, I am looking at my first 4-plex that will bring $700 in positive cash-flow. My biggest mistake in the last 4 years was to take a big gamble on risky 3x ETFs but I’m more conservative now. Hopefully I can turn this ship around.

Nash, I hear you on those 3x ETFs, those are some dangerous weapons that can quickly turn around on you. I’m never touching them again. I talk about how I was killed with those in this post. I don’t envy you living in NorCal, I hate high costs of living–it just seems wrong. Luckily (or hopefully), your income is tracking those costs and you’re able to start piling up a nice cash pile, then you can use geographic arbitrage after retirement.

That 4-plex might be enough to retire on in a few years. I wish I had one.